March/April 2019 AICC BoxScore

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

March/April 2019 Volume 23, No. 2

DRIVING DOWN TIME AND COST 10 ways to reduce setup times and improve productivity

ALSO INSIDE Pump Up Your Profitability 100 Years of Gratitude

TABLE OF CONTENTS March/April 2019 • Volume 23, Issue 2

COLUMNS

46 FEATURES

46

DRIVING DOWN TIME AND COST 10 ways to reduce setup times and improve productivity

52

PUMP UP YOUR PROFITABILITY

52

Small changes can yield a stronger bottom line

58

100 YEARS OF GRATITUDE How one company is making commitments to community, raising the bar from good to great

3

CHAIRMAN’S MESSAGE

4

SCORING BOXES

8

LEGISLATIVE REPORT

12

MEMBERS MEETING

15

ASK RALPH

18

SELLING TODAY

22

TACKLING TRENDS

26

ANDRAGOGY

28

LEADERSHIP

32

MARKETING MIX

34

DESIGN SPACE

64

THE ASSOCIATE ADVANTAGE

66

STRENGTH IN NUMBERS

72

THE FINAL SCORE

DEPARTMENTS

10

WELCOME NEW MEMBERS

37

GOOD FOR BUSINESS

42

MEMBER PROFILE

70

ICPF UPDATE

58

BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2019 AICC. All rights reserved.

Visit www.aiccboxscore.org for Member News and even more great columns.

Scan the QR code to check them out!

BOXSCORE www.aiccbox.org

1

OFFICERS Chairman: Joseph M. Palmeri, Jamestown Container Companies First Vice Chairman: Jay Carman, StandFast Packaging Vice Chairwoman: Jana Harris, Harris Packaging/ American Carton Vice Chairman: Matt Davis, Packaging Express Immediate Past Chairman: Al Hoodwin, Michigan City Paper Box Chairman, Past Chairmen’s Council: Tony Schleich, American Packaging Corp.

President: A. Steven Young, AICC Vice President: Michael D’Angelo, AICC Secretary/General Counsel: David P. Goch, Webster Chamberlain & Bean Counsel Emeritus: Paul H. Vishny, Esq. AICC Canada Director: Jana Marmei DIRECTORS-AT-LARGE Kevin Ausburn, SMC Packaging Group Gary Brewer, Package Crafters Marco Ferrara, Cartones Sultana Finn MacDonald, Independent II Nelva Walz, Michigan City Paper Box DIRECTORS David DeLine, DeLine Box Company Ben DeSollar, Sumter Packaging Eric Elgin, Oklahoma Interpak Guy Ockerlund, OxBox Mike Schaefer, Tavens Packaging & Display Stuart Fenkel, McLean Packaging AICC Canada: Terri-Lynn Levesque, Royal Containers Ltd.

AICC México: Pedro R. Aguirre Martinez, Tecnología de Cartón Overseas Director: Kim Nelson, Royal Containers Ltd.

SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com

EMERGING LEADER BOARD DELEGATES Josh Sobel, Jamestown Container Companies Daniel Brettschneider, CST Systems

CONTRIBUTORS Michael D’Angelo, Vice President Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Meetings and Conventions Chelsea May, Education and Training Manager Laura Mihalick, Senior Meetings Manager Taryn Pyle, Director of Education and Leadership Development Alyce Ryan, Marketing Coordinator Patrick Moore, Administrative Assistant Richard M. Flaherty, President, ICPF

ASSOCIATE MEMBER DIRECTORS Chairman: Dave Burgess, JB Machinery Vice Chairman: Pat Szany, American Corrugated Machine Corp.

Secretary: Joe Morelli, Huston Patterson Printers Director: Greg Jones, SUN Automation Group Immediate Past Chairman: Ed Gargiulo, Equipment Finance Corp.

ADVISORS TO THE CHAIRMAN John Bollender, Niagara Sheets LLC North Greg Arvanigian, Arvco Container Dave Burgess, JB Machinery PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Vice President: Jack Davidson Senior Managing Editor: Ashley Reid Senior Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Associate Editor: Drew Bankert Creative Director: Serena L. Spiezio Art Director: Mike Vucic Account Manager: Brian Hershey

ADVERTISING Information: Virginia Humphrey, vhumphrey@aiccbox.org Opportunities: Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org

ABOUT AICC AICC, The Independent Packaging Association, is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974.

WHEN YOU INVEST AND ENGAGE, AICC WILL DELIVER SUCCESS.

Chairman’s Message

Better. Faster. Richer.

T

he theme of this issue of BoxScore—Better. Faster. Richer.—reminds me of a time when I was a younger pup in this business, when we at Jamestown Container embarked on our total quality management and improvement programs following the philosophy of W. Edwards Deming. This was in the late ’80s, when the concepts of world-class quality were largely new to our business, but not to our customers, who were beginning to demand it. We had to get better fast.

Jamestown’s journey with total quality management was led by my father, Joseph R. Palmeri, who, at that time, was in the leadership ranks of AICC and who believed in the power of the Association to improve the fortunes not only of its members, but of the entire industry as well. So, he sent me out on a mission: to help spread the gospel of the Deming philosophy and how it could help our corrugated and folding carton industries become world-class. This was my first lesson in investing and engaging, because in my travels around to AICC’s regional meetings talking about the Deming philosophy, I saw how AICC members were learning, adopting, and implementing these principles to make their businesses better.

As it was true then, it is truer today: When you invest and engage, AICC will deliver success. If you want to get better, come to an AICC national meeting. If you want to produce faster, attend an AICC regional summit or SuperCorrExpo trade show. If you want to get richer, sharpen your financial knowledge by attending AICC’s School for Financial Managers. And if you want to enrich your industry network and build lasting friendships, participate in AICC’s events on every level. This is true not only for those of you who own your companies, but also for those of you who work in the office, in the design room, and on the plant floor. Your investment and engagement in AICC may not include a national meeting, but it can include our many industry-specific online training programs available through our Packaging School.

Better. Faster. Richer. When you invest and engage, AICC will deliver all these—and so much more.

Joseph M. Palmeri President, Corrugated Packaging, Jamestown Container Cos. Chairman, AICC BOXSCORE www.aiccbox.org

3

Scoring Boxes

How Many Boxes Did You Say?

BY DICK STORAT

I

ndependent corrugated converters regularly read and analyze the box shipment statistics published by the Fibre Box Association (FBA). But, have you ever stopped to think through what they mean in terms that an average individual can relate to? We will do that here.

In 2017, the FBA reported that U.S. box shipments totaled 386 billion square feet. Three hundred eighty-six billion of anything is a hard number to wrap your mind around. But last year there were 324 million men, women, and children in the United States, organized into 126.2 million households. A little calculator work translates those annual U.S. box shipments into 383 one-cubic-foot boxes per year per household. That is a quantity that can be visualized, as are the 149 boxes used per person annually in the U.S. This accounts for all the corrugated boxes needed to get raw and semifinished materials to each step in the manufacturing processes. It also accounts for all the boxes then needed to protect those products through the supply chain from the final manufacturer to each household using those products or the services that those products support.

The U.S.—as are most advanced economies—is an intensive user of corrugated packaging. Not only is corrugated the economic and environmental choice for the broadest spectrum of packaging requirements, but the extensive geography and highly developed infrastructure of the U.S. also increases the need for boxes to protect goods on their journey through the supply chain.

The International Corrugated Case Association provides historical estimates of corrugated production for many countries and all regions of the world.

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BOXSCORE March/April 2019

Number of 1-Cubic-Foot Boxes Produced per Person per Year North America

145

Latin America and the Caribbean

27

34 79

Europe 20

Asia

99

39

3 3

Africa

164

2004 32

World 0

2017 44 50

100

150

Average Annual Growth Rate of Boxes per Capita Between 2004 and 2017 6%

5.4%

5% 4% 3%

2.4% 1.7%

2%

1.9%

1%

0.5%

0% –0.3%

-1% World

Africa

Asia

Combining those data with population estimates published by the United Nations can help us better understand box usage around the world.

There are wide variations among regions and countries of the world when it comes to the amount of corrugated packaging used. Underlying these dissimilarities are differences in the development of national

Europe

Latin America

–0.9% North America

Oceania

infrastructure, type, and maturity of economic development, and many other cultural and social differences.

The charts above illustrate the widely varying rates at which boxes were used in 2004 and 2017, and the differences in packaging intensity growth between those years. Worldwide, an average of 44 boxes per person were used in 2017 to

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Scoring Boxes

Number of 1-Cubic-Foot Boxes Produced per Person per Year United States Canada

111

29

Brazil

44 35 37

Mexico

121

Germany 116 115

France Spain

171 138 142

Italy United Kingdom 20

Russia 4

India

97

142 22

0

20

2004 2017

150

72

40

meet individual needs—less than onethird that of the U.S. That gap suggests there will be ample opportunity for corrugated demand to grow more rapidly than population over the coming decades, as more countries narrow the economic gap between developing and developed nations. Indeed, over the 13 years between 2004 and 2017, world per capita box consumption grew at 2.4 percent per year—double the 1.2 percent per year annual average population growth rate.

At the bottom of the list are the mostly undeveloped countries that make up the African continent. Let’s stick with our reference-size one-cubic-foot box. Only three boxes were used per person on average there in 2017. Three boxes per person doesn’t seem like a lot until you multiply it by the 1.256 billion people living in Africa in 2017. Not only was African unit consumption low, it declined fractionally by 0.3 percent per year since 2004, as rapid population growth outstripped rising demand growth for boxes generated by limited infrastructure growth.

Latin American and Caribbean countries saw usage of 34 boxes per person in 2017—an amount that had grown by 1.9 percent per year since 2004.

BOXSCORE March/April 2019

156

27

10

China

151

103

Japan

6

167

149

136

60

80

100

The different economic profiles of the two largest countries in the region—Brazil and Mexico—resulted in per capita box production growing by 3.5 percent per year in Brazil and by only 0.2 percent per year in Mexico.

However, the real engines of global growth during the past two decades were the developing economies of Asia.

China went from using 22 boxes per capita in 2004 to 72 in 2017, a stunning 9.4 percent average annual rate of growth since 2004. A comparable situation is developing in India, as box demand has grown by 6.5 percent per year between 2004 and 2017. Even though only 10 boxes were produced in 2017 per person in India, that translated into more than 13 billion boxes for the entire country.

The results for Europe combine the effects of the more packaging-intensive developed Western European nations and the more rapidly growing unit corrugated consumption in the developing nations of Eastern Europe. Combined European packaging intensity rose by 1.7 percent per year to reach 99 boxes per person in 2017.

120

140

160

180

Chart 3 (above) shows the number of reference boxes produced per person per year in key developing and developed countries around the world.

Germany (at 171 boxes per person in 2017) was the only country with higher packaging intensity than the U.S., partly the result of a developed economy that is skewed toward manufacturing and export.

As might be expected of the most packaging-intensive economies, efforts to increase packaging efficiency have become increasingly important. The combined unit packaging consumption of North America, for example, declined by 0.9 percent per year over the 13 years ending in 2017. The United Kingdom also saw a slight decline in per capita corrugated consumption. Other developed nations, including Japan, France, Italy, and Spain, all showed only fractional gains in unit corrugated consumption between 2004 and 2017.

Dick Storat is president of Richard Storat & Associates.

He can be reached at 610-282-6033 or storatre@aol.com.

Legislative Report

Advocacy: Then and Now (and Future?)

BY ERIC ELGIN

T

he work of AICC’s Government Affairs Subcommittee falls under the Association’s advocacy mission—that is, that part of AICC that represents the interests of the independent, entrepreneurial sector within our industry and before our government.

In AICC’s early years, advocacy was a much more prominent and public face of the Association. At that time, turmoil in the containerboard markets and surrounding labor and transportation issues in Washington, D.C., brought members together to “do something!” to help defend independent boxmakers.

AICC archives show that AICC members testified on more than one occasion before congressional committees on various issues. One that comes to mind is a 1979 hearing before the U.S. Senate Subcommittee on Antitrust, chaired by then-Sen. Howard Metzenbaum (D-Ohio), where Robert Cravens of Container Service Corp., William Thorpe of Birmingham Packaging, and Joseph Armstrong of Krafcor appeared to talk about the consolidation of the major paper companies and the potential harm to independents.

While this mission of AICC has not diminished in importance, its practice has changed. My friend Kevin Ausburn, CEO of SMC Packaging Group in Springfield, Mo., chairs AICC’s Paperboard, Regulations & Sheet Supply Subcommittee. This group studies issues concerning supply of containerboard, trends in the paper and OCC markets, and other economic factors that influence our raw material supply.

While no congressional committees are holding hearings on these subjects, AICC,

8

BOXSCORE March/April 2019

through this important subcommittee, is still invested in this work.

Our Government Affairs Subcommittee also has its lineage in those early AICC years, but more recently we have focused on general business issues—taxes, regulatory issues, and the like. We do this most prominently at our Print and Packaging Legislative Summit (formerly the Washington Fly-in), a two-day event where we bring members to Washington to visit their congressional representatives and senators to advocate for economic and regulatory policies that are favorable to the manufacturers in AICC’s membership. Since 2003, we have held 14 such events, most of which have been co-located with the National Association of Manufacturers’ (NAM) Manufacturing Summits.

AICC’s Board of Directors recently reaffirmed the importance of our continued advocacy via this means, but it has given my subcommittee the task of looking at ways we can increase participation,

better communicate critical issues to our members, and generate grassroots action when needed. In our current political climate, it’s easy to tune everything out and take on the attitude that this work is unimportant. Yet, it’s critical that we who own businesses, employ people, meet payrolls, and provide benefits have a voice.

We need to hear from you: How can AICC be a better public advocate for your business interests? Send an email to me at eric@okinterpak.com. I’ll be pleased to hear your thoughts, and you’ll be helping your Association. But be warned: I may just ask you to get on the subcommittee to lend a hand to the work we’re doing.

Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs Subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.

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New Members

Welcome, New Members!

PREMIER PACKAGING DENNIS H. WOOD Director of Manufacturing 3900 Produce Rd. Louisville, KY 40218 Phone: 800-518-6305 www.prempack.com dwood@prempack.com

CORRUGATED SOLUTIONS MICHAEL PRASSEL Owner 276 E. Deerpath Rd., Suite 421 Lake Forest, IL 60045 Phone: 847-220-8348 www.corrugatedsolutions.net aicc@corrugatedsolutions.net

NORTH PACIFIC PAPER COMPANY JAY SIMMONS Executive P.O. Box 2069 Longview, WA 98632 Phone: 360-636-6400 Fax: 360-423-1514 www.norpacpaper.com jay.simmons@norpacpaper.com

PACKLANE MIRIAM BRAFMAN CEO/Owner 548 Market St. San Francisco, CA 94104 Phone: 650-796-3795 www.packlane.com miriam@packlane.com

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BOXSCORE March/April 2019

CARDCONNECT CHRISTINA BRAATZ Association Development Executive 7300 College Blvd., Suite 600 Overland Park, KS 66210 Phone: 877-948-9733 www.cardconnect.com cbraatz@cardconnect.com

ECOCHEM GEOFF LITERSKI Managing Director 110 S. Mountain Rd. Upper Plenty, VIC 3756 Australia Phone: +61 416-275-634 www.cleanprintsolutions.com geoff@ecochem.com.au

GRAPHCO CHRIS MANLEY President 6563 Cochran Rd. Solon, OH 44139 Phone: 440-248-1700 www.graphco.com cwmanley@graphco.com

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Members Meeting

The Right Path for the Digital Journey

A

ICC recently completed Digital Technology for Corrugated, a twopart webinar series.

Seventy-four representatives of AICC member companies participated in the free webinar. The first in the series, The Advantages of Digital Technology in the Corrugated Industry, held Sept. 17, focused on insights into the consumer trends driving brand changes and challenges, and on how printer-converters can bring solutions.

Shopper behavior has changed, and packaging needs to do the same.

Corrugated is now playing a bigger role than before and is creating some

challenges. Digital technologies now bring new capabilities and solutions to these brand challenges. Case studies were used to allow attendees to evaluate their own path forward through these changing times in the corrugated industry.

The final webinar, Moving Into Digital Finishing in Corrugated, held on Nov. 15, explained the benefits in digital finishing for the corrugated market, such as improved box performance, reduced waste, larger profit margins, and the value of customization. Attendees were offered the opportunity to see how corrugated suppliers all over the world are producing

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12

BOXSCORE March/April 2019

boxes with dual use and to get answers to their questions regarding the quality of the final product; were given tips to help their customers lower their shipping costs with digital finishing technology; and were offered affordable, customized solutions that fit their needs.

More information about upcoming webinars and seminars can be found at www.aiccbox.org/calendar. Questions about seminars or webinars and the value a well-trained workforce brings to a company can be directed to Taryn Pyle, director of education and leadership development, at 703-535-1391 or tpyle@ aiccbox.org.

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Ask Ralph

On Regulations

BY RALPH YOUNG

M

any of the AskRalph inquires over the last 12 years have related to items on the list that follows.

Now with a significant level of input from an Associate member, Zenna Dunn at Commencement Bay Corrugated, we submit the following rules, regulations, initiatives, and general-interest topics that may have an impact on the paperboard packaging you are producing. We will be expanding the list and adding more information for a white paper on these items. Ultimately, this is meant to be a living document even when it is placed on the website. While items on this list may not have a direct impact on your day-to-day operations today, they may be forward-looking and just interesting for your sales and marketing groups.

Tell us what is missing or inaccurate, please. This list is not comprehensive yet, nor is it alphabetical.

Forestry Certification Sustainable Forestry Initiative Certification (http://www.sfiprogram.org/ sfi-standards/) Programme for the Endorsement of Forest Certification (www.pefc.org) Forest Stewardship Council (https://us.fsc. org/en-us)

The State of America’s Forests by the U.S. Endowment for Forestry and Communities (https://www.usendowment.org/) UN Sustainability Development Goals (http://www.undp.org/content/ dam/undp/library/corporate/brochure/ SDGs_Booklet_Web_En.pdf )

Plant Safety Safety Data Sheets (https://www.osha.gov/ Publications/OSHA3514.html) Occupational Safety and Health Administration (https://www.osha.gov/) National Fire Protection Association (dust) (https://www.nfpa.org/) Bioterrorism Act of 2002: Compliance status with the Bioterrorism Act of 2002.

To its knowledge, albeit paper roll products are exempted, compliance with FDA 21 CFR Section 182.90, 21 CFR Sections 176.170,176.180 and 21 CFR Section 176.260. (https://www.cbp.gov/trade/ priority-issues/import-safety/bioterrorism) Volatile Organic Chemicals or Materials (VOCs/VOMs), Hazardous Air Pollutants (HAPs), Air Toxic Chemicals regulated by Washington State, Extremely Hazardous Substances (EHS), CERCLA Hazardous Substances (HS), or EPCRA §313 Toxic Chemicals. (https://www.epa. gov/superfund/superfund-cercla-overview; https://www.epa.gov/toxics-release-inventorytri-program/tri-listed-chemicals) California SB 657 Transparency in Supply Chains Act Human Trafficking and Slavery (https://oag.ca.gov/SB657) Trace metals statement of guarantee and metal detectors (https:// askralph-aiccbox.org/2012/01/03/ detecting-metal-in-corrugated/) Food Regulations FDA Food Contact Statement – Food and Drug Administration (FDA): 21

CFR Section 182.90, 21 CFR Sections 176.170 and 176.180, and Section 176.260. (https://www.fda.gov/food/ ingredientspackaginglabeling/packagingfcs/regulatorystatusfoodcontactmaterial/default.htm) UN HazMat Packaging Requirements 49 CFR 171–180 (https://www.ecfr.gov/ cgi-bin/text-idx?SID=028795e5b4a0b194cc473338c7237c13&mc=true&tpl=/ ecfrbrowse/Title49/49CIsubchapC.tpl) Heavy Metals: Conference of Northeastern Governors (CONEG) (https://www.coneg.org/resources/tpch/) RoHS EU Directive 94/62/EC Article 11 (http://ec.europa.eu/environment/waste/ packaging/legis.htm) State of California Proposition 65. Safe Drinking Water Act Article 7 Section 12712(c) (1); and also, Reduction of Toxics in Packaging. (https:// oehha.ca.gov/proposition-65/law/ proposition-65-law-and-regulations) Food Allergen Labeling and Consumer Protection Act of 2004 – to compliance with the provisions of FALCPA and EU Directive 2000/13/EC (https://www.fda. gov/Food/GuidanceRegulation/Guidance DocumentsRegulatoryInformation/Allergens/ ucm106187.htm) Lacey Act 2008 Amendments (https://bit. ly/2U5ZJMJ) HACCP: Hazard Analysis Critical Control Point is a management system in which food safety is addressed through the analysis and control of biological,

BOXSCORE www.aiccbox.org

15

Ask Ralph

chemical, and physical hazards from raw material production, procurement and handling, to manufacturing, distribution, and consumption of the finished product. This is administrated by the FDA. (https://www.fda.gov/food/ guidanceregulation/haccp/) Consumer Safety Mineral Oil – We have written extensively on this in the AskRalph blog and past issues of BoxScore, which may be accessed through the search feature at www. aiccboxscore.org.

Consumer Product Safety Improvement Act (CPSIA): analysis for phthalates and lead content provided by CPSIAaccredited third party. (https://www. cpsc.gov/Regulations-Laws--Standards/ Statutes/The-Consumer-Product-SafetyImprovement-Act) U.S. Toxic Substances Control Act (https://www.epa.gov/laws-regulations/ summary-toxic-substances-control-act) Clean Air Act compliant (Title 6 – Stratospheric Ozone Protection) Ozone Depleting Chemicals (ODCs) Address Ozone Depleting Substances: Reference – Containerboard does not require warning labels, per Sections 611 and 612 of Title VI of the Clean Air Act, as amended in 1990. Content of Class I or II substances that are not directly manufactured in a process that uses a Class I or II substance.

Also see 40CFR Part 82. (https://www.epa. gov/clean-air-act-overview/clean-air-acttitle-vi-stratospheric-ozone-protection) Animal Derived Materials “ADMs”: Kosher, Pareve, Passover or Halal Certification: Bovine Spongiform

16

BOXSCORE March/April 2019

Encephalopathy/BSE/Mad Cow Disease, specifically free from beef tallow, or sourced from countries that are BSE-free (https://www.fda. gov/RegulatoryInformation/Guidances/ ucm381379.htm) “REACH,” (EU) Registration, Evaluation, Authorization and Restriction of Chemicals – Substance of Very High Concern (https://echa.europa.eu/ regulations/reach/understanding-reach) Endocrine Disrupting Chemicals – DEHA, DEHP, Bisphenol A, BADGE, Octyl Tin Compounds, Nonylphenol, or TNPP are not used as raw materials.

EU directive on 68 compounds (https:// ec.europa.eu/health/endocrine_disruptors/ overview_en) Canadian Issues Canadian Environmental Protection Act (CEPA) (https://www.canada.ca/en/ environment-climate-change/services/ canadian-environmental-protection-actregistry/related-documents.html)

National Ambient Air Quality Standard (https://www.epa.gov/criteria-air-pollutants/ naaqs-table) Clean Water Act as administered by the EPA. (https://www.epa.gov/ laws-regulations/summary-clean-water-act) Vendor Certification Amazon: Vendor Incentive Program, Amazon Standard Identification Number, USTA 6 Ships in Its Own Container Test, Frustration-Free Packaging Program, Prep-Free Packaging, Amazon Packaging Support and Supplier Network (APASS) (https:// www.packagingdigest.com/supply-chain/ amazons-packaging-vendor-incentiveprogram-crosses-the-pond-2018-11-1) Trade Associations AICC, The Independent Packaging Association (www.aiccbox.org) American Forest and Paper Association (www.afandpa.org) Fibre Box Association (www.fibrebox.org)

Canadian Food Inspection Agency (http:// www.inspection.gc.ca/eng/1297964599443/ 1297965645317) Canadian Domestic Substances List (https://www.canada.ca/en/ environment-climate-change/services/ canadian-environmental-protection-actregistry/substances-list.html#toc0) Plant Regulations Environmental Protection Agency (https:// www.epa.gov/) Clean Water Act and individual states. (https://www.epa.gov/cwa-404/streams)

TAPPI (www.tappi.org) Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor.

Contact Ralph directly about technical issues that impact our industry at askralph@aiccbox.org.

16 -18

AICC 2019 ANNUAL MEETING & INDEPENDENT PACKAGE DESIGN COMPETITION

SEPT

Toronto CANADA

Westin Harbour Castle Hotel

SAVE THE DATE REGISTRATION

TO OPEN JUNE 2019 WWW.AICCBOX.ORG

YOU’LL NEED YOUR PASSPORT, AND MAKE SURE IT’S CURRENT!

Selling Today

Are Relationships the Only Key to Building Sustainable Sales Success?

BY TODD M. ZIELINSKI AND LISA BENSON

I

f your organization is like most, you have an annual goal for sales growth, and your sales team is given goals and objectives based on the company’s overall strategic plan. However, what most organizations fail to develop is a repeatable process for their sales team to reach those goals.

For years, developing customer relationships has been touted as the panacea for all sales woes, and they are often depended upon as the method employed to grow sales. Of course, building relationships is meaningful, but in today’s competitive environment, relationships are not enough to help you keep your share of the market, let alone grow it. However, coupling your relationship-building efforts with a structured sales process has been proven to increase and sustain revenue growth for companies long-term.

A study done by the Harvard Business Review shows, on average, B2B companies that have an effective pipeline process and have trained their salespeople to manage it see 28 percent higher revenue growth over those with ineffective pipeline management.

Often, to meet their goals, many will chase any target, even when it isn’t a great fit for the company. Salespeople are tasked with other duties that often get priority, such as taking care of current customers. Properly hunting for appropriate targets often gets pushed to a back burner, and then salespeople do it haphazardly through no real fault of their own.

Sometimes they can get lucky and generate viable leads by relying on

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BOXSCORE March/April 2019

relationships or product or service features and capabilities, but as the Harvard study demonstrates, the most successful salespeople operate under a structured process and create their luck.

Even if you have a loose process that you generally use, formalizing the process can make you more productive and help you meet your sales goals, which is a benefit to both you and your organization.

Below are some tips that we have found useful in developing a front-end sales process.

Organize and Plan How will you stay on track? A calendar will be one of your best tools. It can be used to block out repeating time slots to actively work on hunting (execution and analysis), setting reminders for follow-ups, and of course, scheduling meetings. It is crucial that you take a disciplined approach and aren’t putting actions off or letting them drop off your radar.

Tracking and metrics are critical to ensuring your plan is working. It doesn’t matter whether you use a database or a spreadsheet, just as long as you do it and update the data consistently. Analyzing the number of prospects contacted, where they are in the sales funnel, potential sales spend, and whatever else is part of your overall plan will help you determine whether you are on track to meet your annual goal.

How many prospects will you need?

Looking at the full year’s goal can be daunting, so breaking it into weekly, monthly, and quarterly goals will make it easier to digest. Divide your desired

annual growth by the value of your average sale to determine how many closures you will need. By using conversion rates at key stages of your sales cycle (e.g., close, proposal, qualification, initial contact), you should be able to determine how many prospects you need to go after monthly or weekly.

Who should the prospects be? Talking to the right prospect is a crucial aspect of success. Look at your current customer list and create a profile. Use the internet, online databases, or other resources to find similar companies and contacts.

Weekly Activities This is where you will execute the bulk of the plan. You determined during your planning stage how many prospects you need to call. If a prospect says to call back at a later date, immediately put it in your calendar as a reminder. Prioritize your prospects.

If they don’t have a current need but may in the future, create a calendar reminder to check back in with them in six months or whatever time frame may be appropriate. In addition, work with your marketing department to put them on a monthly email list to engage that prospect in a consistent stream of relevant communication to nurture them through the sales process. When they have a need, you want to be top of mind.

Monthly Activities On a monthly basis, you want to schedule the time to think about and analyze your data. What worked this past month, and what didn’t? Are you hitting your weekly goals?

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Quarterly Activities Once a quarter, you should analyze your data to determine how you are tracking against your annual goals. Are your monthly goals for prospects moving through the pipeline as expected? For example, if your activities are producing only 10 percent of the number of meetings you expected each month, you might have something wrong in your qualification stage. Are you targeting the right prospects? Is seasonality a factor? What adjustments can you make going forward?

Key Takeaways • A repeatable sales process will increase sales productivity and generate sales revenue.

• An effective front-end sales process should include planning, execution, analysis, and process improvement.

• Scheduling activities and sticking to the schedule are critical.

• Collecting and analyzing data are necessary evils.

• Not every prospect is a good prospect.

• Your plan should be fluid and change as needed to meet your goals.

Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com.

Lisa Benson is senior marketing content consultant at Athena SWC LLC. She can be reached at lbenson@athenaswc.com.

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Tackling Trends

Paper Airplanes

BY JOHN CLARK

A

t first glance, one might think there is little in common between the packaging industry and the world of commercial airlines. But at their cores, both industries are in the same business—the efficient and safe transport of the packaged goods to their destination at a reasonable cost. Though they work at wildly different price points, schedules, and altitudes, both perform primarily the same function—in the case of packaging, without the layover.

Both industries are considered commodities and are slaves to capacity. Each has a cost structure heavily weighted by a single raw material—fuel in the case of the airlines, and paper in packaging—and both have common enemies in weight and distance. Both these industries have historically underperformed the market, often to a frightening degree. But recent days have been better due to mergers, acquisitions, and unforeseen changes to the economy due to the growth of the internet.

A Better Product Weight is a common enemy for both industries. The airlines have always been fixated on reducing weight while maintaining structural integrity. The corrugated industry was a bit slower in moving to lighter board combinations, but the result was dramatic—a large improvement to the financial bottom line with negligible degradation to the end product. The game-changing move from Mullen to ECT allowed the industry to reduce fiber cost, which reduced overall

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Tackling Trends

costs without surrendering margin back to the marketplace.

Improvements in aerodynamics and the introduction of composite materials and more efficient engines have allowed airlines to fly larger planes with fewer fuel costs. Advances in engine design and reliability allow jets to fly on two engines rather than three or more as in previous generations. Lightweight materials in the cabin provide better comfort to the passengers without suffering additional weight costs.

Weight is a common enemy for both [the airline and corrugated] industries.

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Tackling Trends

On the packaging side, high-speed converting equipment reduces the cost per unit, while the introduction of digital printing provides new opportunities for shelf-ready products, with the added bonus of nearly infinite graphic variations at little or no additional costs.

A Faster Journey Not so long ago, booking an airplane flight often took a trip to a travel agent, who had to sift through dozens of options and multiple price points and varying restrictions. The time and expense from planning the trip to stepping off the plane at your destination was long and difficult.

Not so long ago a packaging customer would mail or fax a request for a quote to multiple suppliers and wait for their price sheets to be returned. Order for

goods and the lead time for delivery were measured in weeks. Needless to say, those days are gone forever.

More efficient corrugators, scheduling improvements, and machine automation have reduced lead times dramatically.

Better planning software on the customer’s end gives them greater exposure to upcoming demand, providing better information to their vendors.

The advent of digital printing provides customization to a level unimaginable just a few years ago. Historically, displays for big events such as the Super Bowl could be produced only in the time required for all four permutations of the team pairings to be printed and the losing teams’ output being scrapped. Today, once the final whistle sounds, a simple push of a button sends the digital file to the printer to produce the display with

the correct two teams appearing in the championship game.

A Richer Experience On many planes today, you are actively and passively presented with a host of messages encouraging you to be to loyal to the airline you are flying. Credit card offers, membership offers for frequent flyer programs, airline clubs, and credit cards are all designed for a single reason: to encourage you to be a more frequent user of their services.

Beyond the obvious benefits of the richer palette of digital printing, even the lowly corrugated shipper is now being printed on both sides of the sheet. This previously unutilized canvas can now include instructions, coupons, promotional references, loyalty program data, or instructions for recycling.

These innovative solutions exist to provide better services and a richer suite of solutions, and most of all, to engender loyalty to the vendor. As long as the purchasers of the service feel they are getting more than they pay for, both sides win.

And winning is almost as good as landing early for a flight.

John Clark is director of analytics at Amtech Software. He can be reached at jclark@ amtechsoftware.com.

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Andragogy

A Call for Packaging Managers

BY R. ANDREW HURLEY, PH.D.

M

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BOXSCORE March/April 2019

and the various regulatory agencies that affect packaging.”

• “The courses were very detailed and covered virtually every aspect of packaging types and processes.”

Photo courtesy of Paragon Films.

any of my projects involve supporting large consumer packaged goods companies with research on their packaging decisions. It’s common to see rather large teams that range from a dozen up to 80. However, I recently connected with a global company that manages 300-plus SKUs with just four folks, plus a manager. As I dug into the details, it occurred to me that strong managers with diverse histories of packaging projects can have a significant impact on business operations.

The world needs more packaging managers—folks who understand the supply chain and the business acumen of packaging and who are able to communicate the value that our products provide to brands and stakeholders. Unfortunately, these folks are uncommon and usually not actively seeking employment, with job placement above 90 percent upon graduation from institutions that are unable to accommodate the global demand. There is a tremendous need: 33,000 packaging manager positions and more than 100,000 other packaging jobs are posted on Indeed.com right now.

The Packaging School (www.packaging school.com) has teamed up with Clemson University’s Center for Corporate Learning to provide a unique solution to this industry need. The program is designed for people already in the workforce, and it’s coordinated through online classes, weekly conference calls, and collaborative document-enabled projects. We form a quarterly cohort of brands and packaging suppliers to fulfill Package Development Plans, which enable organizations and teams to build

Thomas Roudebush, product development manager at Paragon Films, obtains his Certificate of Packaging Management.

a full understanding of your customer’s needs. Consider expanding your library of packaging knowledge and empowering your team so they can make better, faster, and richer packaging decisions for your business.

Our recent cohorts featured Blue Buffalo, KIND, RXBAR, and GeorgiaPacific—to name a few—and they had this to say about the program: • “This is a well-structured and engaging program that has given me confidence in manufacturing, design, production processes, and packaging sustainability.”

• “This program helped me level up by sharpening my knowledge and skills in sustainability, materials, project management best practices,

When considering the value of becoming a packaging manager, ask yourself the following questions: 1. Are you able to articulate your client’s supply chain and the needs and risks across each of the package touch points?

2. Are you able to solve issues concerning packaging processes in various areas such as procurement, sales, quality assurance, operations, research and development, (technical) marketing, and logistics?

3. Are you able to identify, report, and resolve bottlenecks within packaging development projects?

4. Are you able to work successfully on a cross-functional team?

Great leaders are often engaging and involved in the community they are leading. By providing everyone the opportunity for education, they have the opportunity to lead by example. Managers should have the tools needed to challenge and drive the package development process.

Learn more about the Certificate of Packaging Management at www. packagingschool.com/cmpm.

R. Andrew Hurley, Ph.D., is an associate professor of packaging science at Clemson University. He can be reached at me@ drandrewhurley.com.

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Leadership

See Productivity and Opportunity

BY SCOTT ELLIS, ED.D.

W

hat does a healthy company look like? The answer to this question is complicated by the observer’s level of objectivity. Both familiarity and novelty can interfere. If the company is very dissimilar to those in prior experience, the novelty may distract.

By the same token, we may be intimately familiar with the challenges a company faces daily but choose to tolerate them as a cost of doing business.

Every producer of goods and services is unique, and none of us is truly objective. The best I can do is to understand my own bias and try to engage in disciplined observation. It is so easy to be distracted by bells and whistles of interesting technology or by specific challenges that would inhibit my view of the company as a whole. I do not look for a specific methodology, but I do look for systems that control results.

The principle I am working from is that effectiveness over time requires great systems that allow good people to use their creativity and smarts to improve the customer experience. Too often, those good people must spend their time shoring up and checking conformance to customer requirements. What we are looking for in an effective plant is evidence of systems that make it easy to do things the right way. We want to see systems through which safe and happy people can produce quality products at the lowest operating cost and with the shortest lead time.

I ask 11 questions when I visit a company. I could have chosen six or 48, but 11 seem to suffice to get the information I need without getting kicked out of the building. These questions are preliminary to forming an opinion about

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BOXSCORE March/April 2019

the strengths and needs of the company.

They are based on years of experience with R. Eugene Goodson’s Rapid Plant Assessment (RPA; see Harvard Business Review, May 2002, “Read a Plant—Fast”).

The RPA is a full plant assessment with many more intrusive questions, but I have used it to follow the same 11 categories with my questions.

1. Customer service: Do employees know their key customers, and do they understand their requirements?

2. Safety: Upon arrival, do you receive information about how to behave safely in the facility?

3. Visual management: Is the environment clean and orderly, and is there a system that helps everyone keep it that way?

4. Scheduling: Is there a method by which employees can tell whether they are on schedule? That is, keeping up with customer deliveries?

5. Product flow: Is it easy to identify raw materials, work-in-process, and

finished goods in the facility, and can you tell where an in-process order begins and ends?

6. Inventory: Is it the policy of the company to produce at the speed of customer demand, or do they produce and hold quantities in the warehouse?

7. Investment in employees: What can you see that shows the company’s commitment to training, teamwork, and other investment in employees?

8. Equipment health: Is there a preventative maintenance program, and does it track how completely it is deployed?

9. Complexity: Is there a seasonality or other variability in products or services that challenges the team, and how do they manage it?

10. Supply chain: Do they buy exclusively on price, or do they partner with suppliers to solve internal problems?

Leadership

11. Quality: Is there a system for identifying and solving internal and external problems so that they are less likely to reoccur?

If there is magic to these questions, it is that they push me to look at all aspects of the business. The answers are a guide to deeper exploration. For example, consider the answer to question two, regarding the company commitment to safety that will be compared to the behavior of the people who work there. It has not been too many years since I was greeted with

safety-fanatic theater and then asked to follow my PPE-free tour guide as he walked across roller conveyers to observe a wet-end corrugator operator dressing a roll while smoking a cigarette. The questions and their answers set expectations and guide observation of supportive and conflicting practices.

These questions have served me well in the plants where I have managed, consulted, or toured to encourage disciplined observation. I will welcome your questions regarding this and other methods of seeing productivity and waste.

Scott Ellis, Ed.D., provides the brutal facts with a kind and actionable delivery when a leader, a team, or a company needs an objective, data-based assessment of the current state of operations and culture. Training, coaching, and resources develop the ability to eliminate obstacles and sustain more effective and profitable results. Working Well exists to get you unstuck and accelerate effective work. He can be reached at 425-985-8508 or scott@workingwell.bz.

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Marketing Mix

Paper Holding Steady

BY JOAN SAHLGREN

I

recently heard veteran salesman Bill Farquharson present to a gathering of seasoned paper and packaging professionals. Farquharson literally wrote the book on The 25 Best Print Sales Tips Ever!, and he immediately had the crowd’s attention as he spoke on how to up your sales game. He reminded folks that activity and staying busy are not the same as being productive.

The dictionary defines being productive as yielding results, benefits, or profits. We all strive to get more out of life, whether it is increasing sales to clients or finding more time to watch our kids on the field.

We struggle with getting it all done. It strikes me that the paper materials that take care of important shipping and branding, help deliver printed nutritional and health information, or help us move through our day as we check things

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BOXSCORE March/April 2019

off our to-do lists are highly valued by people who get stuff done.

The research conducted by the Paper & Packaging – How Life Unfolds® campaign shows it’s true. Those who have seen the ads report that they are more likely to print documents, presentations, and reports (up 14 percent since the start of the campaign). These folks like to be productive in business. They also say they are more likely to purchase products packaged in paper-based packaging versus plastic packaging (up 8 percent).

And they are more likely to ask for paper bags over plastic when given a choice (up 10 percent).

But what about digital productivity?

What about the phones that keep our calendars, show us the way to new destinations, and remind us to pick up our kids? According to market research firm

eMarketer, consumers spent more than 12 hours a day with media of all kinds in 2018, with more than half spent on digital devices (desktop and phones).* Yet, importantly, consumers say paper continues to play an important role even as technology becomes more advanced, with 80 percent of people who have seen the ads agreeing.

Paper materials serve an important purpose. Research shows that, given the choice to use paper, packages, and printed pieces, people value them to help organize activity into productivity, help achieve their goals, and live abundantly.

Joan Sahlgren is senior director of public relations at the Paper and Packaging Board. She can be reached at jsahlgren@paperand packaging.org.

*Source: “Average Time Spent With Media.” eMarketer, Sept. 2018, www.emarketer.com.

Design Space

A New Adventure

BY SCOTT NEFF

O

n the way to a new adventure, a young couple packs their belongings into boxes. On Christmas morning, the floor is decorated with opened boxes. On your front porch, a recently delivered order sits in a box.

Many people get their packages and don’t think twice about how their product actually arrived. They don’t think about the craftsmanship required to create the perfect box, whether it be for a birthday present, a business marketing strategy, or even for a mass production. Box factories around the world are quiet competitors, acting as an integral part of both business success and personal joy.

In the corrugated industry, Skybox Packaging uses recycled paper to make the old brand-new. We turn simple paper into a complicated six-color aqueous-​ coated 20-piece point-of-purchase (POP) display that has reached the end of its promotional period at a supermarket, or the regular slotted container (RSC) that protected your online order that was delivered to your door without any damage to the product inside. Designers and manufacturers alike become a team to get the product from our floor in quality condition for the multipurpose tasks that boxes so often serve. The technology we have today also allows for more cost-​ effective, speedy production. We have the capability to develop high-quality products with low-quality paper. Despite the nature of the materials, we can still maintain the integrity of products through technology, hard work, and the well-oiled machine of a successful factory.

A day at Skybox begins with prepping the die room for deliveries and ordering tools for future orders. We also meet with sales representatives, customer service

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BOXSCORE March/April 2019

members, or new clientele. Employees at Skybox work on various tasks throughout the day. For example, the design team attends daily production meetings to cover daily agendas, hot orders that need to be expedited, customer concerns, and new item reviews. The future designers on our team will face an emphasis on understanding that every package or display presents its own set of challenges, each with an array of possible solutions. Designers are expected to use all the resources from senior production employees, die suppliers, and machine suppliers. They search the internet for POP displays to replicate images when customers may supply only a sketch or picture. As a designer there is much to consider, such as cost-effectiveness for the customer, your company’s ability to produce a particular item, how to effectively print art, and to

always maintain clear communication about customer objectives.

Corrugated design is a fulfilling career, as you never stop learning new ways to design effectively. It is also a rewarding experience to see items in retail that you were instrumental in producing.

Corrugated design can be fast-paced and enjoyable, but you must embrace a fluid lifestyle. Life changes quickly in the corrugated industry because an item designed months ago could become a hot rush item today.

Scott Neff is a senior designer at Skybox Packaging. He can be reached at sneff@ skyboxpackaging.com.

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37

Good for Business

Risk Management

The State of Freight

BY DOUG FRIEL

M

ore boxes are being manufactured than ever before. Box companies are churning out their products to consumers at a rapid pace, and these increased sales have a major impact on the domestic supply chain.

More sales lead to more deliveries, which lead to more trucks on the road than ever before. There is an increased demand for quality drivers, but there’s one issue: Unemployment rates are at an all-time low (yes, I just said that is an issue—let me explain).

Unemployment being at an all-time low means that all the quality drivers are already locked down with full-time trucking jobs. What’s left of the unemployed trucker pool are likely individuals with poor driving records, individuals with bad habits who can’t hold down a job, or recently released convicts trying to find employment. All are difficult employees to manage.

In this day and age, several issues arise that affect the quality of employees and the increasing risk of accidents on the road. Distracted driving is at an all-time high with everyone glued to their phones, texting, checking emails, or looking for directions. The legalization of cannabis is spreading like wildfire throughout the United States, and it’s more and more accessible. The legal consequences seem less and less stringent as well. A quick stat: The Insurance Institute for Highway Safety and the Highway Loss Data Institute jointly conducted a study and found that the states that first legalized the recreational use of cannabis have seen a 5.2 percent increase in auto crashes. There is no established method

38

BOXSCORE March/April 2019

of measuring the impairment level of an individual using cannabis, which leaves employers to pre-employment or post-​accident drug screening as the only method of vetting their hires for use.

This significant increase in auto accidents causes a domino effect. Not only is frequency on the rise, but severity and the size of the settlements are up as well. All of this consequently causes an increase in auto insurance rates.

At this point you might be asking, “What can we do about this? How can we turn this around?” There are so many ways to reduce the risk that these problems present. Please consult your risk management partners for the best advice.

• Safety training. There are many different types of training your company can adopt to better equip your drivers with knowledge and help them form good habits while simultaneously reducing the frequency of loss on the road. Drivers can be required to pass online training programs prior to getting behind the wheel. If you’re looking for more of a personal touch, insurance loss control experts can hold in-house formal training sessions with all the drivers to convey the information they need.

• Drive-alongs. Loss-control experts can ride along with your drivers to ensure they are practicing safe habits and critique anything they feel the drivers should change, as well as reinforce positive behaviors.

• Technology. Many insurance companies offer products that can track the performance of the driver. These products simply plug into the vehicle

or cellphone of the driver and can analyze the speed of travel, hard stops, sudden turns, and any other red flags when it comes to driver performance.

• Due diligence. You can set up driver criteria programs that can be utilized during the vetting or hiring process using motor vehicle reports to ensure your business is getting the best-quality drivers. This process can also be used throughout the year as you check up on your drivers.

• Incentives. Offer incentives to your drivers for traveling X amount of accident-free miles (e.g., a $500 bonus for going 500,000 miles without an accident). You can also offer additional vacation days or give your best drivers access to the newest vehicles.

If you have any questions, please consult your risk-management professional.

Doug Friel is vice president of Johnson, Kendall & Johnson. He can be reached at 215-5796439 or dfriel@jkj.com.

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Hire Veterans: Bringing Qualified Candidates to Member Plants

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BOXSCORE March/April 2019

database, candidate matching, an automated matching tool that connects employers with candidates whose skills meet companies’ requirements, and a military skills translator, allowing companies to fully understand what job a veteran held in the military and how their skills might apply to open positions. The platform will link to certain AICC Packaging School courses so that candidates can get an understanding of the packaging industry, another step to ensuring a good match.

Justin Constantine, partner at JobPath, will present a human resources workshop, Solve the Work Shortage Crisis — Justine Constantine, Marine Corps veteran and partner Recruiting & Retaining Veterans, at JobPath, will present a human resources workshop at during the AICC 2019 Spring AICC's 2019 Spring Meeting.

Meeting on Tuesday, April 2.

Constantine joined the Marine Corps while at the Ribbon, and Navy-Marine Corps University of Denver School of Law and Commendation Medal. served on active duty as a Judge Advocate Constantine retired from the Marine General’s Corps officer for six years. Then as a reservist, he deployed to Iraq in 2006, Corps and now runs his own business as an inspirational speaker and veteran serving as a civil affairs team leader while employment advocacy expert. His writing attached to an infantry battalion. During on military and leadership issues has a combat patrol, Constantine was shot in been published in The Washington Post, the head by a sniper.

Time, The Atlantic, and Forbes Magazine, Although the original prognosis and featured on CNN and other was that he had been killed in action, media outlets.

Constantine survived thanks to risks AICC members will have access to spetaken by his fellow Marines and a cial pricing for employee searches and job courageous Navy corpsman. For his postings through the AICC JobPath portal. service in Iraq, Constantine earned Learn more at www.aiccbox.org/jobs. the Purple Heart, Combat Action

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A

ICC has partnered with JobPath, an innovative online job portal designed to connect military veterans with employers and to help members solve their ongoing need for qualified candidates. AICC members can post jobs for free or purchase discounted subscriptions to have their positions promoted to qualified candidates.

“This is a very exciting program that we are announcing,” says AICC Vice President Mike D’Angelo. “Everyone can get behind hiring veterans and their family members. Those are easy words.

JobPath’s unique platform will ensure that there is a great fit between the veteran hired and the AICC member company doing the hiring.”

Launched in 2013, JobPath, the first employment engine in the market designed for military veterans and their families, provides companies a platform that uses advanced technology to help employers understand and connect with the most qualified veteran candidates.

“We are very excited that AICC has chosen our technology as their preferred tool for veteran hiring,” says Jack Fanous, CEO of JobPath. “JobPath was designed to serve as a technology solution for veteran hiring, utilizing artificial intelligence and machine learning to match employers to the most qualified candidates. With this powerful platform at their disposal, AICC will offer an incredible tool to help their members recruit the best veteran candidates for their open positions.”

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COMPANY: Complete Design & Packaging ESTABLISHED: 2002

Photo courtesy of Complete Design & Packaging.

JOINED AICC: 2004 PHONE: 704-793-4400 WEBSITE: completedesignpackaging.com LOCATION: Concord, N.C. OWNERS: Howard Bertram, Scott Sumner Complete Design & Packaging has been in its Concord, N.C., facility since the company's inception in 2002.

S

ometimes tragedy can spur us on to be our best selves and to accomplish more than we thought we were capable of.

For Howard Bertram, the events of 9/11 provided a new perspective—realizing the delicacy of life and the need to pursue more ambitious aspirations—to take the leap from employee to owner. After 13 years in the industry, he decided it was time to stop watching and learning and to open his own business.

“You’re always going to learn—17 years later I’m still learning, but at some point you have to get in the game,” Bertram said. “[9/11] is what got me in the game mentally. It encouraged me to get on with it.”

Bertram, co-owner and president of Complete Design & Packaging, started

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the company from scratch. He says the days following 9/11 were good in two ways: 1) They gave him the courage to move forward, and 2) many markets crashed after that event, and with the economy dropping off, there was affordable equipment available and plenty of empty buildings around to rent. With no backing, funding, or loans, Bertram made the leap and opened up on April 1, 2002. It was a jump that paid off in a big way for him.

“We have grown from just a small mom-and-pop startup with five or six people, including myself, to 110 people and a large facility with a house full of equipment,” says Bertram. “We are very much in a continued growth mode.”

Complete Design & Packaging created a model of being ultracreative and

cutting-edge. It was a model that became their reputation. Bertram says visitors are often amazed at how quickly they got to where they are—a company that owns state-of-the-art equipment and competes by taking risks that allow them to do more for their customers.

One of the latest examples was in December 2017 and January 2018, when when they were the first in the country to install a single-pass digital printer made

by EFI. “That’s a very cutting-edge and highrisk/high-return proposal, and we did it. We’re a one-off independent, and yet we were able to pull that off and do a business deal with an outfit like EFI.” And they’ve continued to do business with EFI, a relationship that grows to the benefit of both. In January, they

Member Profile

installed an EFI VUTEk h5—a multipass digital printer.

“We’ve been able to add a lot of new business and stir up a lot of industry attention,” Bertram says. “We are continuing to put ourselves out there as a leader in the Southeast region of high-graphics digital print design. We’ve been able to add a lot of jobs.”

While Complete Design & Packaging strives to keep up with the latest technology, Bertram says it isn’t just the equipment and “toys” that others don’t have. Instead, what sets them apart—and he emphasizes that it sets them apart in a good way—is the culture that they have and the way the company lives.

Bertram says that those who work for Complete Design are a cohesive bunch and that they look out for one another.

“Our vendors, our customers—they feel it and comment on it when they visit here.

They see our folks with their heads up and chatty attitudes,” says Bertram. “The way we live our life, our culture here, is what makes us really different.”

He says they try to always treat people the way they want to be treated and to encounter everyone with trust and respect, especially among those who work there.

“We can have all our fancy stuff all day long, but at the end of the day, it is how we behave,” Bertram says.

Complete Design & Packaging has been in the digital print field for seven years, but their new printers have broadened the scale of what they do. They’ve had to hire new people and train those they have to new skills and equipment.

It’s an endeavor that he says has their employees invested and excited.

“They’re ecstatic,” Bertram says. “They see our name out there. We’ve had a tremendous amount of traffic of guests and vendors. They’re seeing construction in the building. It’s exciting for our employees.

They’re used to seeing us moving and shaking. But it is thrilling for everyone from top to bottom to see the changes and the new bodies coming in.”

Virginia Humphrey is director of membership and marketing at AICC. She can be reached at 703-535-1383 or vhumphrey@aiccbox.org.

ON THE CUTTING EDGE A company that always tries to have the latest in technology for its customers, Complete Design & Packaging recently invested in Esko’s Kongsberg C64, a digital cutting system with a feed and camera recognition system.

“That is another state-of-the-art feature,” says Howard Bertram, owner and president of the company. “We have created a print and production lab with the EFI VUTEk h5 so that we’ll be able to run digital print for small-run orders and then cut them on the C64.”

The C64 features: • Carbon composite traverse. It is equipped for high speed and fast acceleration, and it maintains consistent accuracy on all materials.

• High-powered 3kW milling. The Kongsberg tables are the only ones with this unit on a superwide finisher. The tables can be configured for applications ranging from small runs with light materials to lengthy jobs with heavy-duty material.

• Down force for creasing. The heavy-duty tool unit offers 110 pounds of down force, which allows the user to crease even challenging materials at a large diameter (150 mm).

• Tool calibration. There are integrated tool tip height sensors that allow for tool, bit, or blade exchange at a fast rate.

• Table mapping. The dynamic table-mapping procedure

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provides a real-time update to exact field conditions.

• Ergonomic design. The workstation is designed for operational ease, comfort, and safe use. It includes a joystick and operator panel and can be installed wherever it best meets the needs of the user.

• Auxiliary control panel. Production speed is increased by an auxiliary panel at the end of the traverse so the operator can make adjustments.

The C64 has a work area of 126.37 inches by 126 inches. The max material width is 126.5 inches.

“Why is that special?” Bertram asks. “You’re cutting at a very high speed, and you can accommodate customers who couldn’t have high-graphic displays before. We can offer it without the high cost that was associated with it.”

He gives the example that while, before, a display may have cost $25, there was another $20 in tooling costs. Now businesses can have the same display cost, but no tooling charges.

“That puts your regional markets and your smaller customers in the game,” Bertram says. “They now can participate in the display category, where before they may have had to be generic.

Now they get a customized print and cut display without all that tooling.”

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DRIVING DOWN TIME AND COST

10 ways to reduce setup time and improve productivity

By Lin Grensing-Pophal

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he production cycle for many manufacturers, including box manufacturers, has been significantly shortened over the past several years, driven to a large degree by technology and consumer demand for faster and faster turnaround for all the various types of interactions and transactions they take part in daily. With Amazon providing two-day shipping at no cost through their Prime program, and other retailers following suit, companies of all kinds are finding that whatever customers are ordering online and through their smartphones, they want it now!

“Before we had a computer in our pocket, people just purchased from 8 a.m. to 6 p.m.,” says Leslie Pickering, co-owner of Quadrant5 Consulting, a firm that works with manufacturers in the corrugated and folding carton industries to help them streamline their processes.

“Purchasing 24 hours puts an enormous pressure on manufacturing cycles. There

are greater demands in terms of shorter lengths of turnaround. All manufacturing facilities are under cost pressures, which create difficulties for them because the cost of power, labor, and equipment is all going up.”

For box plants, says Pickering, the ability to make quick changeovers is a must. Driving down setup time and increasing speed to market can help manufacturers save a lot of money, he says. “Quick changeovers allow them to have more flexible schedules—the more flexibility in the schedule, the more profit they can make.”

Mike Nunn, vice president of operations at Ideon Packaging, agrees that there is ample opportunity for box manufacturers to make improvements that can directly impact their bottom lines. Nunn, who is Lean Black Belt-certified, uses tools such as kaizen and PDCA (plan, do, check, act) to drive measurable improvements. Taking steps to reduce setup times, says Nunn,

can be a low-cost way to find hidden capacity in your operations. He notes that the first time he performed a kaizen on a flexo, he was able to demonstrate savings of 70 percent. That’s a significant time— and cost—reduction.

Here we take a look at 10 best-practice ideas for reducing setup time and improving time to market: 1. Upgrade equipment. Advances in boxmaking technology mean that manufacturers have access to better and faster equipment fueled by software advances that can both boost speed and reduce or eliminate the need to shut equipment down to change orders. But, notes Pickering, the equipment side of the equation is relatively easy, assuming the purchases can be made within budget and provide payback in a reasonable amount of time. Where the challenges most often lie is with the “human element,” he says.

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2. Engage and involve your operators. There’s power in your people—they have knowledge, experience, and insights that you can leverage to help make improvements that can drive time out of the setup process. Don’t overlook that knowledge. By engaging your team in whatever changes you wish to make, you’ll boost the odds that they will be on board with those changes. In addition, get them involved in ongoing monitoring and measuring. Are the changes you’ve implemented having the desired impact? If not, reconvene to discuss additional steps and opportunities for improvement.

Create a culture of continuous improvement, in which operators know that they should be making suggestions regularly and coming together at specific times to consider whether new practices or processes should be implemented. “It’s a great opportunity to pull a team together,” says Nunn. “Pull together all of the stakeholders and ask them about the setup and where their challenges are; truly understand the process from their view, and not necessarily the management view.”

3. Formalize changeover processes.

Most companies don’t have these, Pickering says. Instead they rely on their operators to “figure it out.”

The problem with this, he says, is that “if you don’t have a formal way, you can’t train for it, and if you don’t have a standard process, you have variability.” And, what happens when a high-performing operator leaves for another company or retires? Their knowledge is lost, which impacts the production

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“Quick changeovers allow [manufacturers] to have more flexible schedules—the more flexibility in the schedule, the more profit they can make.”

— Les Pickering, co-owner, Quadrant5 Consulting process and turnaround times.

Documenting changeover processes that are derived based on the best-practice experiences of operators can be an important way to reduce variability and changeover times.

4. Ensure an environment that supports the performance of the process. The area around the equipment, or the industrial environment, needs to be visually easy to see to support the processes—that means, says Pickering, that there is nothing in the area that is not needed. “It’s really back to a bare-bones skeleton,” he says. And, it ensures that the tools or equipment that operators need will always be where they expect them to be. “If you’re the lead operator and I’m the assistant, and you say to me, ‘Go get me that 6-millimeter wrench,’ and if that wrench isn’t where it’s supposed to be, now I have to go and find

it.” That takes time—unnecessary time that slows down the process and increases costs. Some seemingly minor things can have major impacts here, says Nunn. For instance: having tools on shadow boards close to the machines where they’re used. A simple step, yet one that can reap huge dividends.

5. Re-reference the machines.

Whenever an operator does a setup, says Pickering, they need to have confidence that if they need to print 2¾ inches from the lead edge, that the machine will go to that position every time. Re-referencing the machines on a regular basis—at least monthly—can help to ensure that level of confidence.

6. Break down—and document— internal and external changeover tasks. Internal elements are those that require going into the machine

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as it’s stopped to perform some kind of action—changing a plate, for example. These actions can be taken only when a piece of equipment is down or not running.

External elements are actions that can be taken while the machine is running—cleaning a print plate, for example. If any of these actions are not operating as efficiently as possible, says Pickering, setup times will be impacted. That requires a solid understanding of exactly what sorts of activities (internal and external) are taking place, whether there are opportunities to expedite them, and then documenting those actions so they are performed consistently with minimal to no variability.

This is, says Nunn, perhaps the biggest action item that manufacturers can undertake to achieve operational impacts. “Identify everything that needs to be done in a task, and separate into internal and external actions.”

7. Think lean. Nunn’s experience in lean manufacturing stresses an ongoing focus on ensuring that only value-added tasks take place in any production process. “Do all of the tasks add value, or are they nonvalue-added?” he asks. In the lean environment, there is a focus on identifying various forms of waste that can be part of any process and then eliminating, or at least significantly reducing, those items. This isn’t, or shouldn’t be, a one-time activity, he notes. “It’s repeating a PDCA process of let’s identify waste and eliminate or reduce it to shrink the amount of time it takes to produce the setup.”

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“Pull together all of the stakeholders and ask them about the setup and where their challenges are; truly understand the process from their view, and not necessarily the management view.”

— Mike Nunn, vice president of operations, Ideon Packaging 8. Don’t overlook electronic information flow. It’s not just the production process itself that should be considered when seeking to reduce setup time, Nunn notes. Consider electronic information flow as well. A combination of paper and electronic systems may offer the best options for data flow, he says. For instance, paper tickets can be lost and waste time in trying to determine who has the ticket. Automating these tickets can ensure that information is available and readily accessible when and where it needs to be.

9. Adopt a “pit-stop” mentality.

Nunn points to auto racing as a good example of how efficiencies can be introduced to significantly minimize the amount of time taken to perform a specific task. A pit crew can change out four tires and fill a tank of gas in less than three seconds. Having dedicated setup people can help achieve these efficiencies. Nunn says he’s a big believer in the SWARM (sudden, work, aligned, rapid, measured; see “Setup Reduction,” BoxScore, July/ August 2018) mindset—he wrote a piece last year for AICC on the concept and how it can be used to reduce setup time.

10. Do the math! Crunching the numbers can yield valuable information and provide a baseline or reference point to calculate the value of making specific changes.

How many changeovers did your machine perform over the past year?

How long did it take to perform the changeovers? If you could reduce that time by 50 percent, what would the dollar impact be?

Boxmakers, says Pickering, need to think more as if they’re performing a ballet than playing hockey. “I want it to be a choreographed changeover,” he says. “It should be like ballet—that’s the only way.”

How could taking time to consider some of the best practices above help you to drive time and cost out of your production processes? There’s no time like the present to gather your team members and begin considering opportunities for improvement.

Lin Grensing-Pophal is a writer based in Wisconsin.

She is a frequent contributor to BoxScore.

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PUMP UP YOUR PROFITABILITY

Small changes can yield a stronger bottom line

By Robert Bittner

Y

ou do not have to purchase multimillion-dollar machinery, move to a larger building, or expand into new products and services to strengthen your bottom line. Even small changes can deliver big results. And small changes are typically easier to implement and often inexpensive (if not free). They won’t be as flashy as a gleaming new machine or expansive facility. But over time, they can significantly improve your overall profitability.

Preventive Health Care “As everyone knows, the costs for health care are only going to go up,” points out Les Pickering, co-founder of Quadrant5 Consulting. “We need to ask if we can reduce our costs by doing the right things, preventive things, on a day-to-day basis.

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“When you think about health and wellness, ask yourself how much you are spending on health care versus how much you’re spending on prevention,” Pickering advises. “Look at that ratio, and then ask, ‘How can I shift some activities and costs toward prevention?’

“Prevention includes everything, even your vending machines.” Look at the selection of items stocked in your vending machines, Pickering suggests, and if it is predominantly junk food, consider supplementing or replacing those items with healthy alternatives.

“But don’t stop there. Promote fresh fruit on Fridays rather than doughnuts,” he adds. “Maybe you could have fruit and yogurt or low-fat cake for birthdays.

Encourage vendors who may be bringing in breakfast items or token treats to

focus more on grains and fruits. After all, ornate fruit baskets look amazing and taste good. These small changes can lead to big, big improvements in health.”

Workplace Safety Preventive steps are equally valuable for reducing the number of—and costs associated with—workplace injuries.

“Workplace injuries can be very costly to a company and drain profits,” notes Brian Storms, corporate environmental, health, and safety manager and corporate packaging engineer for Jamestown Container Cos. “Depending on the severity of the injuries, annual worker compensation costs can rise to a million dollars or more.”

The biggest culprit? Complacency, which accounts for many common and avoidable workplace injuries. And,

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unfortunately, the longer you operate without a significant injury, the more complacent workers can become.

“A safety-first culture encourages workers to remain mindful of what they’re doing at all times and to remain vigilant for accidents waiting to happen,” Storms says. Signage, slogans, and regular training and discussion sessions all help.

But managers should keep in mind that even a great message, if repeated day-in and day-out without variation, will eventually fade to mere background noise. Changing the message occasionally and altering how it is delivered can help to keep it fresh.

Waste Management “Waste costs money,” says Nelva Walz, vice president of Michigan City Paper Box Co., a rigid box manufacturer. “But waste also can be a way to make money if managed properly.”

For starters, Walz suggests looking at how waste and overs are currently being managed. “The normal standard is that you allocate about 3 percent for waste for each step in the production process,” she says. “So, if I’m die cutting a board, that’ll have 3 percent waste. If I’m printing paper, I have to add 3 percent more for waste. Add an additional 3 percent for setup and make-ready. By the time the job is done, you can reach about 12 percent waste on paper alone!

“In the long run, it can make a big difference if you are able to make even small changes to reduce waste at every point in this process. If you’re working with an outside vendor, find one whose equipment and setup can do multiple steps at one time. Going from four steps to two, for example, could potentially save 6 percent in waste—and that saves money. Make

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“When you think about health and wellness, ask yourself how much you are spending on health care versus how much you’re spending on prevention,” — Les Pickering, co-founder, Quadrant5 Consulting

sure each part of the process is done with the least number of touches.”

Walz notes that it’s also important not to let leftover materials languish in the warehouse. “For large-volume jobs that will be run again, save or keep unused materials for use in future runs. Count the unused materials, then label and store them,” she advises. “You need to identify those leftovers that could be used for the next project, store them properly, and inventory them accurately so you know what materials you have and exactly where they are. Also, you have to communicate to everybody on your team that you have those materials available.

They need to know that if they’re running that specific box size again, they should ask the materials handler to locate the leftover materials. Those things add up.”

Similarly, Pickering believes it can help to ask how much money you may be losing due to waste associated with orphan pallets.

“An orphan pallet is the final pallet of every job than runs through conversion and finishing,” he explains. “You have all seen them: the 14"-to-20" of the last four-to-six bundles, the overruns. The palletizer does not want them, as they frequently have to be loaded by hand.

The racking system does not want them, as they lose precious capacity in the

warehouse. The transportation system does not want them because they take up a fraction of the space that the rest of the order does, so it hurts the cubing of the trailer. Finally, the operator of the flexo folder gluer (FFG) does not want them” because they take longer to process. “Add up counting the items, modifying the final load tag, entering into the production to reconcile the order, and then tagging the pallet,” he adds. “All of that is time that the operator isn’t spending on changing the job order on the FFG to the new order. This is why we often need to have an additional person on the FFG. I’d encourage plants to stop processing orphan pallets and start shipping full small pallets. That would save the industry a fortune.”

Rail vs. Road “Freight is often an afterthought on any job because the customer pays for it,” Walz says. “But think about long-term customer building. With one of our customers, we keep saving money for them because of how we ship, which is why they keep placing orders with us.

“Are you using the most effective way to ship boxes?” she asks. “Let’s say you’re on the East Coast and your customer is on the West Coast, and they want their boxes by the end of the month. If you

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can get that order done two days earlier, maybe you can offer to ship via rail versus road. Train is almost always 30 to 50 percent lower than on the road, especially if you’re shipping a partial load; less-thantruckload (LTL) shipments are usually very expensive. But on rail, they can combine your shipment with other loads.

I know nowadays it sometimes seems like every job is a rush. But if the deadline isn’t critical, you can maximize your profitability when it comes to shipping, in cooperation with the customer.

Walz recalls one very simple change that cut her customers’ shipping costs in half.

“We make rigid boxes that a customer down the line will typically put things inside.

Because they want to receive open boxes to streamline their fulfillment, often we’re asked to ship covers and bases separately, which of course doubles shipping costs.

Instead, offer to ship covers and bases together, but with the cover under the base, leaving the box open when it ships. This is called a reverse-close, and it is a simple change that can save a lot of money.”

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• Standardize auto-bottoms so they are all set up the same way at the specialty folder gluers.

• Continually monitor and maintain aging equipment to minimize obsolescence.

• Use staff from local sheltered workshops for large hand-labor runs.

• Pick up sheets and supplies (glue, foam, etc.) on backhauls to minimize incoming freight costs.

• Reduce the amount of trim on die-cut orders (for example, using ⅜" instead of ½"). It may save only pennies per run, but over time, it will increase profitability.

Along similar lines, Pickering adds, “I see operators leaving station all the time, which has an impact on overall efficiency. Often, they leave to go to a central print area.

Consider the difference it would make, though, if every machine were able to print its own load tag. It would keep the operator on-station and reduce lost minutes—even lost hours over the course of a year.”

Refinements From the Front Line

Ask and Analyze

Small changes can also involve tweaks to processes and procedures that shave off time and eliminate unnecessary steps, improving overall efficiency. A number of such changes were highlighted when Storms solicited profitability tips from the plant managers at Jamestown Container.

Their advice included: • Stagger lunches and breaks to keep machines running.

• Take a “pass the baton” approach to shift changes so machines don’t stop if they are in the middle of a production run.

• Cross-train all operators, which can help to minimize or eliminate dropoff during vacations and sick days.

No two converters or industry suppliers are going to be identical in terms of equipment, staff, culture, and customer needs. To find those specific areas in your own operation that could benefit from small changes, consider the value of internal benchmarking.

Berni Hollinger, a consultant with CH Consulting Group, writes, “Internal benchmarking compares the results of one department, team, or individual within an organization to another. It’s determined which practice or procedure produces the best results. Then that practice or procedure is adopted by other departments, teams, or individuals within the organization with a view to improvement throughout.”

BOXSCORE March/April 2019

For example, she notes that a plant may be satisfied most with how its third-shift production line is running.

Maybe that shift has lower waste and demonstrates greater efficiencies. That shift’s performance would then become the benchmark for other shifts.

Management needs to analyze just what, exactly, that third shift is doing that sets it apart. “The analysis could focus on leadership expectations, teamwork, and setup procedures—anything that may help them determine why the third-shift results are more successful than the other shifts’,” Hollinger notes. “The results would then be shared with managers for the first and second shifts, and a course of action would be set to implement improvements. “[Internal benchmarking] relies on management to review the data and determine what the benchmark is and then to follow through with making the changes necessary to achieve expected results,” she writes. However, “the effectiveness of any benchmarking process depends on following through on the results. … It should be reviewed regularly and used to achieve bottom-line improvements.”

In short, you simply need sufficient information to expose the shortfalls, the curiosity to ask why something is being done a certain way, and the willingness to try a different approach if it might make more sense—saving time, money, and perhaps even frustration along the way.

Robert Bittner is a Michigan-based freelance journalist and a frequent BoxScore contributor.

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Photos courtesy of Liberty Diversified International.

Education at local schools is a huge part of LDI's initiatives.

100 YEARS OF GRATITUDE How one company is making commitments to community, raising the bar from good to great

By Ann Miller

A

s Liberty Diversified International (LDI) approached its 100th anniversary in 2018, it was clear that a very special celebration was in order. However, somehow a huge cake, golf tournament, fireworks display, or fancy customer reception didn’t seem like us. As a fourth-generation family-owned business, it wasn’t lost on us that there were a lot of people responsible for keeping the company around for a century. So, we decided to spend our entire year on a quest to thank those people.

We put gratitude at the center of everything we did in 2018, and remarkable things began to happen—and are still happening as we launch into the next century.

Every activity we engaged in as a company during this special year had two main goals: 1) to show our gratitude to a customer, employee, community partner,

or unsung hero, and 2) to inspire people to pay forward their own gratitude. We launched our gratitude movement around Thanksgiving in 2017, seeing this special holiday as the perfect opportunity to elevate gratitude in entirely new ways. We rallied around three major efforts this year to put gratitude on steroids, celebrating our century-old legacy and launching us into the next 100 years.

1. Boxes of Gratitude: Every quarter, we designed creative boxes to send to our customers, employees, and community partners with items inside that expressed our gratitude and challenged them to pass it on.

We included blank pay-it-forward checks, thank-you notes, gratitude games, and other mementos to put gratitude on their radar. Our list of nearly 10,000 recipients learned

to expect this gratitude gesture every quarter. They knew that thanks was coming in a very special way—and they knew they had a responsibility to extend that thanks to somebody in their own lives.

Watching this gratitude movement spread like wildfire put our faith back in humanity and the power of appreciation.

2. The Great Gratitude Tour: In July 2018, family members, employees, customers, and community partners loaded a gratitude bus and traveled the country for 21 days in search of unsung heroes to thank. We asked more than 200 “gratitude ambassadors” to join this tour with us, roll up their sleeves, and give back to the communities that make our company so strong. At each of

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Good people with good values—they’re what got us here to 100, and they’re what will propel us into the next 100.

The Great Gratitude Tour stop at LDI's Illinois plant.

our 18 stops, we identified different unsung heroes who give so much to our world but often go unappreciated. We treated them to food and friendship and left them with a Gratitude Grant to continue making their mark on their world. More than $1 million was awarded through this effort, recognizing unsung heroes such as garbage haulers, teachers, cancer researchers, and youth sports coaches, just to name a few.

3. Gratitude Education: LDI acknowledged that to truly ignite a gratitude movement, we needed to teach the next generation about gratitude. So, we set out to reach 18,000 youths this school year with a 30-minute gratitude education curriculum taught by our own employees. Kids learned the art of recognizing unsung heroes in their own lives, and how to write

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a proper, old-fashioned thank-you note to ensure these heroes get the appreciation they deserve. We have entered hundreds of classrooms, teaching kids ages 3–18 about the power of thank you. Our employees have shared that it is the most rewarding volunteer work they have ever been privileged to do—and on company time. All LDI employees are expected to give at least eight hours of company-paid time to giving back to their communities through efforts such as this.

Companies That Do Good, Do Well

also put a value on impacting the world in meaningful ways. They build stronger communities in which our business can thrive. They help us attract top-notch talent who value volunteerism and philanthropy. Good people with good values—they’re what got us here to 100, and they’re what will propel us into the next 100.

Our second-generation company leader Ben Fiterman once said, “If you take care of your people, and you take care of your customers, everything else takes care of itself.”

A simple strategy, but one that has kept us in business for a century now.

Of course, giving back, extending gratitude, and volunteering are the right things to do. But at LDI, we believe that doing good is the reason we have stayed in business for a century. Our caring values are not only a reflection of our 2,000-plus LDI family members, but they also help us attract customers who

We want to create a gratitude movement that spreads like wildfire. At LDI, we believe the industries we participate in have real power to ignite this effort and that our world could use a bit more gratitude right now. We are showing

Will You Join Us?

E N I L N O E FRE

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• Maintenance Mapping • 18 Ways to Sell Value • Metal Packaging • Achieving Higher Levels of Productivity • Navigating Time: Time Management for the Job • Better Printing Shop • Build a Visual Workplace with 7S • OEE for the Packaging Industry • Communication for Coaches • Optimizing the Flexographic Printing Process • Conceptos Basicos de Corrugado • Package Printing • Corrugated Basics- English and Spanish • Packaging Design Workflow • Corrugated Containers Fundamentals • Packaging Foundations • Delegation DIY • Packaging Production Math • Distribution • Packaging Regulations • Essential Principles of Water-Based Flexo Inks • Faster, Better, Smarter with Value Stream Maps • Paperboard Cartons • Preventative Maintenance Optimization • Fingerprinting the Flexographic Press • Project Planning: MAPP the project for Success • Flexographic Print Fundamentals • Safety Basics • Flexographic Print Plates • Setup Reduction • Fundamentos de Seguridad • Standardized Work • Glass Packaging • Go Team! How to Make Your Team More Productive• Sustainable Packaging • The Corrugator • How to Spec a Corrugated Box • Understanding Accounts Receivable and Cash • Internal Staff Development Guide • Understanding Anilox Rolls • Introduction to Polymers • Keeping Score: How to Read Financial Statements • Understanding Combined Board Combinations • Warp, and How to Control It • Machinery

AICCBOX.ORG/PACKAGINGSCHOOL

appreciation for the blessings we have, the people in our lives, the customers who keep the lights on, the employees who give us their hearts and minds, and the unsung heroes who surround us.

AICC is a community filled with companies that care—it’s why we choose to associate with all of you. How will you empower your organization to show more gratitude? Strong financials and stellar products may make good companies, but we believe that great companies come from strong values, a spirit of giving back, and a commitment to appreciating the underappreciated.

Who will you give thanks to this year?

The cashier who bags your groceries?

The courier who delivered an important package just in time? The Little League coach who believes in those kids on the

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Strong financials and stellar products may make good companies, but we believe that great companies come from strong values, a spirit of giving back, and a commitment to appreciating the underappreciated. field and lets them know it? The waste hauler who takes your garbage away every Tuesday? Unsung heroes are all around us, and they’re not hard to find if we look.

Please help us look. Help us thank.

And help our industry be the one that makes gratitude cool again. To join us, visit www.boxesofgratitude.com.

Ann Miller is LDI’s centennial celebration project lead. She can be reached at annmiller@ libertydiversified.com.

AICC DELIVERS SUCCESS AICC will deliver trainers with real-world experience into your plant to lead a personalized training seminar based on your company’s needs.

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Production • Machine Efficiency • Controlling Color • Maintenance & Troubleshooting • Maximizing Old Equipment Customer Service • Managing & Exceeding Customer Expectations • Negotiating • Building & Maintaining Relationships • Managing Difficult Accounts Design • Differences between Structural & Graphic Design • Printing on Different Substrates • Understanding Color Theory • Creating Retail Ready Packaging Leadership • Appropriate Costing of Materials & Staffing • Measuring Production • Identifying Waste in Time, Dollars & Effort Sales • • • •

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AICC listens to your needs and pain points and creates training just for your company.

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The Associate Advantage

Our Flourishing Business

BY PAT SZANY

PAT SZANY AMERICAN CORRUGATED MACHINE CORP. VICE CHAIRMAN PSZANY@ACM-CORP.COM

DAVE BURGESS JB MACHINERY CHAIRMAN DBURGESS@JBMACHINERY.COM

JOE MORELLI HUSTON PATTERSON PRINTERS SECRETARY JMORELLI@HUSTONPATTERSON.COM

GREG JONES SUN AUTOMATION GROUP DIRECTOR GREG.JONES@SUNAUTOMATION.COM

ED GARGIULO EQUIPMENT FINANCE CORP. IMMEDIATE PAST CHAIRMAN EGARGIULO@EFC-FINANCE.COM

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BOXSCORE March/April 2019

2019

appears to be another year of growth and challenges for the corrugated industry. Boxmakers continue to seek new ways for increased productivity and increased sales, to explore new markets, and to determine where best to invest in their plant and equipment. A common theme expressed by many is the need to reduce head count. With near-full employment in North America and increased demand for their products, it’s difficult for box plants to keep up. This has resulted in an increase in demand for material-handling upgrades such as prefeeders, robots, load formers, and motorized conveyors. Machines that run faster and set up more quickly also put a strain on the infrastructure of the plant. There is a need for more efficient scrap systems to provide dust removal and cleaner air. Vacuum transfer machines are now moving mass air through the plant that needs to be cleaned and returned through a system that was designed 20 years ago.

Many are also experiencing unpredictable growth and opportunities. This has led some to enter new markets such as specialty gluing, label laminating, and digital printing, which all require additional equipment, proper training, floor space allocation, and marketing strategies. These are among the many concerns that arise from this growth, but an income stream diversification is one way to counter a possible slowdown.

A corporate engineer of a large U.S. company once shared his concern regarding their box plant operations during peak times. The concern was the avoidance of a situation in which they would be unable to ship products due to an equipment malfunction. He found three critical pieces of equipment that needed to

remain operational, ensuring scheduled shipments. They were the compression strapper, the air compressor, and the baler. They did a survey and discovered that many of these machines were more than 20 years old, with little or no viable backup on site. A corporate directive was issued to correct the situation, making sure there was no redundancy.

Sometimes it is easy to focus on the whiz-bang appeal of new equipment and technology and to forget the basics. As business and technology continue to get better and equipment gets faster, there is always a need to stay focused on the basics of production.

The only thing that is certain is change.

Thirty years ago, most of our independent customers made boxes with letterpress printer slotters and semiautomatic tapers or gluers. Many realized that this was not going to be cost-effective in the long run, and they started to invest in flexo folder gluers and rotary die cutters. These investments yielded better productivity and higher profits. This also allowed them to focus more on quick turnaround and the value-added market. Most did not see the rise of consumers buying products online instead of going to the mall and its effect on box demand. Huge distribution centers are popping up all over the place and utilizing boxes at a greater and greater pace. Amazon has its own fleet of vans making deliveries seven days a week. That is a lot of boxes. So, as long as there is a need to get products from point A to point B in a safe and cost-effective manner, the box business will continue to flourish.

Pat Szany is president of American Corrugated Machine Corp. and vice chairman of AICC’s Associate Board.

Thank you Education Investors These companies are making a significant contribution to the online education available to all AICC members.

For more information, contact Mike D’Angelo, Vice President, 703.535.1386 or mdangelo@aiccbox.org.

Strength in Numbers

Measuring Success

BY MITCH KLINGHER

R

eturn on investment (ROI) = (profit on investment ÷ cost of investment).

If you purchase a stock for $1,000 and sell it for $1,500, then your ROI is 50 percent ((1,500 – 1,000) ÷ 1,000)).

Pretty good, right? But what if you held the security for 10 years, and what if the effective tax rate on the gain is 30 percent? Then I guess you would say that the ROI is 2.33 percent ((1,500 – (0.3 × 5,000) – 1,000) ÷ 1,000 ÷ 10)). Not so good, right?

But what if you are considering an investment in a piece of equipment, purchasing a line of business, retooling a plant, selling off a division, entering into a licensing agreement, or hiring new salespeople? The costs of the proposed transactions are often not clear-cut, the cash flows generated or given up by the proposed transactions are often difficult to predict, and the measurement period is usually arbitrary. The more variables you add to each revenue or expense stream, the more complicated the calculation becomes. In addition, this method does not take into account the time value of money (net present value, or NPV), in that a dollar received in the future is not as valuable as a dollar received today.

Another way to look at this is by measuring the “payback period.” The payback period is the length of time required to recover the cost of an investment. The formula for calculating payback period is the cost of the investment divided by the annual cash flow. So, an investment in something that costs $500,000 and is expected to generate $100,000 in annual cash flow would have a payback period of five years. Obviously, the longer the payback period, the less attractive the investment is. This method is subject to

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the same difficulties in calculating both the investment and the resulting cash flows, and whether the number of years is good or bad is also somewhat subjective.

This method also does not factor in the NPV of the cash flows.

In order to take into account the time value of money, economists came up with the concept of internal rate of return (IRR), which is also known as the discounted cash flow rate of return.

This method used a discount factor to the annual cash flows in an attempt to make them equivalent to current dollars in the rate-of-return calculation. Use of the term “internal” refers to the fact that the internal rate excludes external factors, such as inflation, the cost of capital, or various financial risks. While this method may be superior to the others because of the NPV calculations added to the formula, the selection of the discount rate to use is also somewhat arbitrary.

Those of you who have read some of my previous articles know that, in my opinion, the most important factor in making an investment is the ability to generate enough cash flow annually to pay for the investment. Since there are very few investments that create enough efficiencies on their own to pay for themselves, the enterprise must generate additional sales to break even. This calculation of break-even sales is rather simple (negative cash flow ÷ expected contribution margin of new sales = sales required to break even); it basically quantifies the amount of new revenue the enterprise must generate each year to cover the costs of the investment. For example, let’s say you buy a new piece of equipment that costs $1 million, will cost the company $220,000 per year in note payments, and

The only thing that really matters is the increase in enterprise value (EV), and everything should ultimately be measured against EV. will require a crew of three people costing $150,000 per year, plus other operating costs (maintenance, insurance, utilities, etc.) of $50,000 per year. The annual cash flow to break even would then be $420,000 per year. If a conservative contribution margin on new business for this piece of equipment is 30 percent, then the sales required to break even would be $1.4 million ($420,000 ÷ 30 percent). One could certainly argue that this cash flow should be reduced by any tax savings that the operating expenses, interest expense, and depreciation expense would generate, but of course this is valid only if the company is profitable. Under the current tax laws, the entire $1 million would be deductible in year one, so the cash flow required to break even in year one could be close to zero, depending on the tax rate.

All of these methods—and others— have a place in evaluating a specific investment. They are all limited by various assumptions and fraught with inaccuracies and complexities, but in a world filled with investors, creditors, and

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Strength in Numbers

bankers, the prudent businessperson must make some calculations to justify the investment. In addition to these stand-alone methods, a pro forma balance sheet should also be prepared to evaluate the investment from the point of view of leverage and working capital.

But is crunching all of the numbers and preparing the pro forma statements on each investment enough? What do measurements of profitability, cash flow, liquidity, and leverage really tell you? Are they, in and of themselves, measurements of success or failure? There are various measurements that can be made at the company level to ascertain what the overall returns to the company are on such things as sales, assets, and equity. Certainly a high percentage of net income, EBIT (earnings before interest and taxes) or EBITDA (adding back depreciation and amortization as well) computed against sales, assets, or equity would be an indication of success.

They all have their places in the world of finance, but do they really tell the story?

In order to evaluate them, you need to understand the rules that generally accepted accounting principles use in the calculation of net assets and net equity, and in how capital costs are charged to income. Balance sheets, which show the asset and equity values, are based upon historical costs, not current values. So that building Grandpa bought in 1950 for $1 million that sits on 50 acres of prime real estate is now on your books for $250,000 (original land cost) plus the depreciated cost of whatever improvements were made to the property over the last 70 years or so. The fact that it is worth $100 million today is not reflected anywhere in these calculations. So, if the company made $1 million last year, the calculated return on assets or equity

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might look pretty darn good, but if you added the $100 million to the equation, the returns would be less than 1 percent.

Similarly, recently purchased equipment that is worth less than the current depreciated cost on the books creates problems with these calculations. In addition, balance sheets are often puffed up with intangible assets created by capitalizing the costs of obtaining debt or equity financing, which leaves the assets and the equity overvalued.

I apologize for getting a little technical with you here, but I felt the need to highlight a serious problem that we all have with how to measure success.

As you all know by now, I am a great believer in the KISS school of finance, which is why I like the calculation of break-even sales in the arena of equipment justification. It is a fairly simple calculation that yields a powerful result—what additional sales revenue do I need to generate to pay for this thing?

My opinion of the overall measurement of success for business enterprises is that the only thing that really matters is the increase in enterprise value (EV), and everything should ultimately be measured against EV. At the end of every year, the key questions should be: • Did we increase EV? −− Which investments contributed to or reduced EV and why? −− What future investments can we make to help us increase EV? −− What were the internal and external factors that contributed to the change in EV? • What was our overall return on EV? −− Are there better alternatives for us to invest in if we monetize some or all of our EV?

Public companies know what their EV is at all times, so this kind of analysis is much easier for them. Private companies can find out for sure what they are worth only if they put some or all of their assets out to market, which in and of itself can be constructive or destructive to their value. If customers or competitors know they are for sale, their operating environment will most definitely change.

Therefore, one of the keys for all private companies is to find a methodology by which to compute EV and apply it on a consistent basis to help them measure their current success, to plot their future success, and to evaluate their current and future ROI. So, loyal BoxScore readers, you now have a homework assignment. Give some thought to what your company is worth and why, and see if you can come up with a rational methodology with which to make this calculation at every measurement date. Then calculate the change from the last measurement period and your returns against this value. You will end up with a truer measure of your success (or lack thereof). Since everyone seems to enjoy a good cliffhanger, I will give this some further thought as well, and do a future article on various methodologies that can be used to calculate economic value. See you all in Miami—safe travels to all.

Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.

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International Corrugated Packaging Foundation I N T E R N AT I O N A L

PACKAGING

CORRUGATED

F O U N D AT I O N

L

ong known for its pulp and paper program, North Carolina State University (N.C. State) is adding a new dimension to its Department of Forest Biomaterials. Through the assistance of ICPF’s corrugated packaging awards program, the university is launching its first corrugated packaging and design curricula track. The new program, which will receive ICPF donations and funding over a three-year period as N.C. State delivers measurable steps, will expand student capabilities and interest beyond the mill into plant production and operations management, design, sales, and ultimately, mid-level and upper-level executive management.

As the first part of the partnership between ICPF and N.C. State, ICPF will install a CAD table and Impact software in N.C. State’s new corrugated packaging lab this semester. Discounts and donations on the equipment, software, training, and installations are being provided to ICPF by Gerber Technology and Arden Software. With more than 180 students annually enrolled in the university’s Paper Science & Engineering program, N.C. State is working to become a major recruitment resource for ICPF Corporate Partners in the mid-Atlantic, southern, and other regions of the U.S. For more information, visit www. careersincorrugated.org.

Photos courtesy of N.C. State's Department of Forest Biomaterials.

ICPF Launches Corrugated Packaging & Design Curricula at North Carolina State

The more than 180 students who are annually enrolled in N.C. State University's Paper Science & Engineering program will begin taking mandatory corrugated packaging and design curricula this spring and fall.

ICPF Annual Student Dialogue Dinner

T

gaining additional knowledge on the his past February, 32 select students corrugated industry as well as a unique from Bowling Green State University perspective on the program through (BGSU), Illinois State University observing the other 500 students on the (ISU), Michigan State University (MSU), 20 campuses who were able to interact University of Florida (UF), and Virginia remotely. Jeff Turner, president of Pratt Tech joined executives (from Landaal Packaging, Green Bay Packaging, Menasha, Industries’ Northern Corrugated division, attended the dialogue dinner and served PCA, Pratt Industries, Smurfit Kappa, and WestRock) for ICPF’s student dialogue din- as one of the industry speakers at ICPF’s Teleconference on the Business of ner on corrugated packaging careers. The Corrugated Packaging the next day. “The executives provided the students further number and quality of the students at the insight to careers in the industry. dinner and teleconference were impressive, Twelve of the students from BGSU, triggering my renewed focus on campus ISU, UF, and Virginia Tech were recruiting for new talent,” Turner says. provided ICPF travel grants for travel “At the broadcast, the students’ questions to East Lansing as ICPF’s dinner and were both insightful and challenging. It Teleconference guests. The visiting stuwas promising to see the interest level in dents joined the MSU student audience the corrugated industry from the over in the public broadcasting auditorium the 500 students who participated.” next day to view ICPF’s Teleconference,

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Most of the students who have participated in the annual dialogue dinner program in past years have accepted positions in the corrugated industry upon graduation. The résumés for the students attending this year’s dinner, as well as more than 100 other qualified upcoming graduates, can be accessed on ICPF’s Career Portal by ICPF Corporate Partners that post student internships or full-time entry-level openings. While an average of up to 150 new graduates and student interns are hired annually through ICPF resources, students are hired quickly by other industries, so there is a small window of opportunity to recruit student interns and 2019 graduates before they are hired elsewhere.

We encourage ICPF partners to contact ICPF and use the Career Portal today.

International Corrugated Packaging Foundation I N T E R N AT I O N A L

PACKAGING

CORRUGATED

F O U N D AT I O N

ICPF 2019 Student Design Presentation Competition

T

he ICPF Teleconference this past February included ICPF’s 2019 Student Design Presentation Competition. Three student teams from Cal Poly and the University of Texas at Arlington (UTA), were tasked to show, tell, and sell their designs (that won first or second place in a separate 2018 AICC design competition) by explaining the objective, the research conducted, design,

Utilizing ICPF’s Career Portal since this past August to post 2019 openings, two ICPF Corporate Partners already have hired over 40 student interns and upcoming 2019 graduates. and other background. One Cal Poly team secured first place. Second place went to the UTA student team, and the second Cal Poly student team won third place. All three teams received a cash prize. These exceptional students have posted their résumés on ICPF’s Career Portal and are using it to locate spring 2019 career openings in the areas of sales, production and operations management, and design.

With hundreds of students seeking 2019 openings in the industry, now is a crucial time to reach out to recruit students. Utilizing ICPF’s Career Portal since this past August to post 2019 openings, two ICPF Corporate Partners already have hired over 40 student interns and upcoming 2019 graduates. For those ICPF Corporate Partners (and firms considering Corporate Partner pledges) that have entry-level openings or wish to offer a student internship, the single most proven tool for recruiting is ICPF’s Career Portal. Not only do you get direct applications from new or upcoming graduates, the posting of an opening also allows your firm to search ICPF’s online Résumé Bank, which has more than 150 résumés. If your firm has an entry-level opening in sales, production management,

business, packaging design, chemical or other engineering, or you wish to locate a student intern for this coming summer or fall, contact rflaherty@icpfbox.org to get started. ICPF’s Career Portal is a free benefit for ICPF Corporate Partners.

Richard Flaherty is president of the International Corrugated Packaging Foundation.

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The Final Score

Future Thinking, Even in the Past

J

ust about 35 years ago at this time, I was writing the March/April 1984 edition of BoxScore, then only a small newsletter for AICC members. The feature story was about AICC’s upcoming 1984 Spring Meeting at the Doral Hotel & Country Club in Miami, with the theme “Equity. Ethics. Evolution.” Here’s what I wrote: “Join your boxmaking colleagues for what may very well be AICC’s most innovative meeting program yet! From April 25 to 28 at the fabulous Doral Hotel & Country Club, you’ll hear noted box industry players and observers dwell on Change. Change in the economy. Change in technology. Change in capital investment. Change in the industry and change in the Independent’s role in the $10 billion box market.”

AICC BoxScore, March/April 1984

Apart from the fact that the “$10 billion box market” is now a $40 billion box market, the same description can pretty much be given to AICC’s 2019 Spring Meeting, returning this year to a much more plush Trump National Doral. The program there, “Invest in Your Future,” echoes the forward thinking that the Association was doing way back in 1984. In fact, as I think about it, all of the AICC meeting agendas, summits, and educational programs are forward-​looking, with a view toward preparing members to better their businesses, improve their operations, and enrich their stake in the marketplace. We think “Better. Faster. Richer.”

Our chairman, Joe Palmeri, echoes this in his opening message in this issue, in which he stresses the “invest and engage” theme that he will be emphasizing the entire year. AICC membership is an asset that cannot lie underutilized; it is an engine that requires regular “firing up” in order to move your business.

So, fire it up and move forward. Invest and engage in your most future-thinking Association, AICC!

Steve Young President, AICC

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